The most important thing to me is that it fits the context they are in. If you take LotR for example it seems to work perfectly because everyone of the fellowship is biased in a way. We learn that elves and dwarves, especially the mirkwood elves and the dwarves of the lonely mountain, have had a rough relationship to each other for centuries. Aragorn grew up with the elves, which makes him estrange to the other humans, particularly Boromir and so on..
It makes sense and makes the reader all the more happy to see the friendships blooming.
On the other hand there was a book series I read as a teen where the protagonist gathered a cast of exclusivly hot young women. There it just seemed the author found a way to act out his fantasies.
I roll my eyes every time there is a "Dwarf character" or an "Elf character", instead of a character who is a Dwarf or a character who is an Elf.
These characters remind of those awful characters from the 90s who's sole character feature was their race, gender, or sexual orientation.
It's just lazy writing to let any single thing take over a character.
So no, if a character is an elf or dwarf I won't automatically hate it. If being an elf or a dwarf is their ONLY characteristic, then I'd hate them.
If an author can write them well, then it makes no difference to me. If, on the other hand, [they write characters like this](https://twitter.com/awfulfantasy/status/595364160587730945?lang=en), then I'll pass.
I don't really care about what gender, race or species the characters are, although such differences are always good for examining cultural differences and creating interesting group dynamics. I think that if they're too homogeneous - in one way or another - the story can get boring, and a very heterogeneous group can make things confusing and make it look like the author was trying too hard to be all-inclusive.
I like it when each character brings something special to the story, e.g. where one is a good fighter but perhaps bad at communicating with others, while another is a good communicator but a lousy fighter, and so on. Abilities don't all have to be opposites of each other - they can be complimentary or overlap.
A fantasy novel I read many years ago had a cast that consisted of a young woman, a knight in rusty armour, and a group of animals on a quest where each had a specific role and unique problem-solving skills. I found that quite an interesting cast. (*The Unlikely Ones* by Mary Brown).
I dislike Mary Sue characters - those amazing creatures who are practically perfect in every way. A group of them is even worse.
I like books with fictional races. Most of the time it makes those characters unique and more memorable than if they were boring old humes. Sometimes it makes me want to roll my eyes, not this trope again. But it won't make or break the book for me. Maybe.
My favorite thing to see is characters that are not just literally human, but also act human. Malazan is my best example when we follow around the marines. We see them grieve, laugh, fight, etc. They act like real people. They're not always heroic, some are cowardly, some are great people, some are compete dicks, and on. War and death affects them, they don't just go through the motions as if killing massive groups of people is second nature. They don't blindly follow orders as if they're just a hive mind. I think that's one thing a lot of authors get wrong when writing about people.
Also this isn't to say I don't like the use of other races at all. What I don't like is stereotypical races. Elves that live in a perfect utopian society and are all gorgeous, short stocky dwarves with beards and pickaxes etc. Be original!
My favorite fantasy books are from 1980s-1990s. They feature all Tolkein or DnD style non magical creatures. The ones that don't feature those characters I still enjoy, because they might feature their own personal inventions.